Community Banks Big Opportunity with Efficient and Profitable Digital Business Lending

The facts are clear that community banks are missing a $20 billion revenue market in serving small businesses who want loans of $100k or less.  It is amount equal to nearly 20% of their total revenues!

The <$100k loan market segment represents over half of all loans for businesses.  But banks under $10 Billion, community banks, have less than $2 billion in C&I loans under $100k.  This compares to $140 Billion on business credit card balances, owned primarily by a handful of large banks.  All bank small business loans under $100k total just under $200 Billion.   “The business credit card has become the default loan source for small business” documents the Wall Street Journal article on banks cutting bank on small business.  The article reports, “It costs banks about the same to originate a $100,000 loan as it does one of $1 million.  Credit cards cost a lot less to issue.”

Non bank lenders leveraging digital technology now have over 20% market share of small business loans, reports the WSJ article, and are growing fast.  Digital lending also allows an efficient delivery structure.  Community banks have deposit checking relationships with small businesses, but see loan relationships for these customers go to business credit cards and now non digital lenders.  Implementing efficient digital lending technologies not only can save money on existing loans but also open up a large new revenue market for community banks.

Turn-key digital lending technology can allow you to have your brand, your underwriting and your control with no security risk to drive efficiency and revenue growth.